3 things you must do before hiring a new employee
Whether you’re looking to hire your first employee or simply adding to your current team, there are 3 things you really must do before any new hires step through the door – to reduce your risk of significant infringements and penalties.
Prepare a position description
You may know that you need ‘help’, but you need to be more specific than that before hiring an employee. A position description (PD), is necessary to establish the award (if any), that the role falls within. This (along with the Fair Work Act), will outline the minimum pay and conditions associated with the role. You must ensure that you can and will meet these requirements before taking on your employee. Penalties for non-compliance with the Fair Work will soon be up to $126k for individuals and $630k for companies.
There’s also no point taking on a staff member who expects to answer phones, manage your social media accounts and handle emails when you really need them to pick and pack orders and take them to the post office. Having a PD lets prospective employees know what the actual job entails. Down the track, a PD also serves as the basis for any performance reviews. You can’t expect your employee to perform and meet expectations if they don’t know exactly what’s expected of them.
Verify that the prospective employee is legally permitted to work in Australia
Employing someone who doesn’t have the legal right to work in Australia places you at risk of fines up to $63k for an individual or $315k for an incorporated entity, and even a prison sentence. You must take reasonable steps to verify an employee’s right to work. This can be done by:
- Viewing an Australian or New Zealand passport**.
- Viewing an Australian birth certificate and photo identification**.
- Verifying eligibility via the government’s free Visa Entitlement Verification Online (VEVO), service.
- Viewing a certificate of permanent resident status and photo identification**.
** Australian and New Zealand citizens and Australian permanent residents have an automatic right to work in Australia.
It is important to remember that it is illegal to discriminate when it comes to the hiring and treatment of employees. Therefore, you need to ensure that any questions posed to employees or potential employees are asked to all.
Ensure you have adequate WorkCover insurance
WorkCover insurance covers the cost of benefits (including medical expenses and payment of wages), to workers in the event of workplace or work-related accident or illness and is compulsory for most employers. Insurance premiums are based on the ‘rateable remuneration’ of the business. This roughly equates to the total amount of remuneration paid annually to eligible employees.
New employers will need to select a WorkCover Agent and register for insurance (if applicable). Established employers may need to contact their agent to advise an increase to their rateable remuneration as a result of hiring a new employee. An accident could occur within minutes of a new employee walking into the workplace and penalties apply to employers found to be without or with insufficient WorkCover insurance. Uninsured employers could find themselves liable for the lost wages, medical and rehabilitation expenses of an employee and even a lump sum payment in the event of a serious injury.
There are obviously more than 3 steps involved in hiring a new employee. But these 3 are some of the more important, most forgotten – and more costly to get wrong. So make sure you get them right.
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Disclaimer: Blogs posted by MMO HR Solutions are for information purposes only and do not constitute professional advice. The reading/use of any blog posts does not form a consultant-client relationship. The reading/use of any blog should not be used as a substitute for professional advice.